The Rajya Sabha has passed the Companies (Amendment) Bill, 2017 (“Bill”) on 19th December, 2017 after being passed by the Lok Sabha on 27th July, 2017.
The amendments under the bill largely aim at the following:
- addressing difficulties in implementation owing to stringent compliance requirements;
- facilitating ease of doing business in order to promote growth with employment;
- harmonisation with accounting standards, the Securities and Exchange Board of India Act, 1992 and the regulations made thereunder, and the Reserve Bank of India Act; 1934 and the regulations made thereunder;
- rectifying omissions and inconsistencies in the Companies Act, 2013. (“Act”)
Some of the Key highlights of the Bill are:
- Companies are required to have registered office within 30 days of their incorporation.
- The time period for giving notice of change of situation of registered office has been increased from 15 days to 30 days.
- Companies having Associate Company (ies) will be required to file consolidated financial statements for such Associate Companies in accordance with the applicable accounting standards.
- The extract of the Annual Return is no more required to form a part of the Board Report to be attached with the Financial Statement while placing the same in a general meeting of the company. Instead, the Board Report shall state the web address of the concerned company wherein the Annual Return will be placed.
- Companies which fall within the threshold of the specified net worth or turnover or net profit are required to constitute the Corporate Social Responsibility (“CSR”) Committee in any financial year. The words “any financial year” are replaced by the words ‘immediately preceding financial year’. This implies that the threshold requirement(s) under Section 135 of the Act to form a CSR Committee will be triggered depending on the net worth or turnover or net profit related to the immediately preceding Financial Year.
For a further read of the bill please refer to the attachment.
Source: The Institute of Company Secretaries of India.